Well, that was a really refreshing break - it was good to do without internet access for a few days! Several nice fish have been duly landed, smoked and sliced so winter supplies will be fine - and as a result, less other meat will be consumed, thus saving the planet. (Seemingly some character at the UN reckons that a veggie diet would massively reduce greenhouse emissions.) Given the UN's overall track record, methinks he might possibly be incorrect in that assumption, which is to do with methane emissions from cattle. Better perhaps to do away with politicians - getting rid of the hot air that emanates from that source would probably be more beneficial.

Anyway, back to the grindstone and over to my Really Scary Granny for a wee look into her crystal ball, which is suggesting that a few recent utterances from some of "those who should know better", are somewhat divorced from reality.....First, there's the OECD, which is suggesting that the UK will be the only country actually to suffer a recession. Nae chance. Almost ALL western economies are pretty much in the same boat and a widespread recession is inevitable now - sure, the UK's will maybe be deeper than others but everywhere will suffer. Next we note that the chief economist at the Halifax says "The (property) market continues to be supported by high employment, low interest rates, and a shortage of new houses." Just dropped in from outer space for a quick visit, has he? Then there's the Savills economist who is claiming that the British property market will "recover" by 2010, then prices will rise 20% by 2012, after which it will be boom time again. Three words to consider, Madam: In... Your... Dreams. Two weeks ago in WICS, mention was made of the Savills chief exec's views - this latest prognostication from the lady in question, smacks of desperation to me - estate agency jobs are fast disappearing as we all know and doubtless hers is also at risk. Sure, it's likely that by 2012 things will have bottomed - that's to be expected just as long as government interference doesn't drag things out even longer. It's called "boom - bust - boom" etc etc and despite Grumpy Gordon's determination that he had ended that kind of thing while he was busy destroying the UK economy, it's actually both normal and inevitable. It ain't gonna change! Why not? Because markets are driven by human emotion - ie sentiment - and humans in the mass are more than a tad on the manic depressive side. "Manic" when they feel really, really good - creating an overheated boom scenario, and I guess I don't need to elaborate on the other side of the coin, given current conditions. Let me know when human nature has changed and then I'll change my opinion about how markets operate. So from this particular cynic's viewpoint, prices for most "stuff" - including property - will probably be plumbing the depths by 2010 and it's likely the Savills lady is vaguely correct in suggesting some kind of minor recovery thereafter - but a "boom" from 2012 on? What would be needed to create the next property boom? Would "manic" feelings be enough on their own? "Yes" is the answer. But how would the necessary universal feelgood factor be created? Secure employment, a stable geopolitical environment, and easy money would do the trick. What are the probabilities for that scenario within the next four or five years? Far more likely is an ongoing crash until mid - late 2010 and then a year or two bouncing along the bottom before a slow, steady climb back out of the depths, taking asset values back up to near current levels over another twenty years or so. THEN the next major boom can be expected, once the next load of wet behind the ears kids gets a chance to become fund managers and (aaghh!) bankers and politicians. It was ever thus - it's just that this time, the "top" from which the "drop" began was far, far higher than anything that has gone before - and therefore the "drop" is going to be massive. It has hardly even started yet - the point being that this time ALL asset classes are affected - just look at the gold price (by the way - thanks for that call, Granny.) Sure, falling interest rates and ongoing inflation are bad news for savers, but saving hard cash is nonetheless a brilliant idea right now. Bargains will abound in the next few years, for those with the dosh or with untainted credit profiles. In due course, banks will want to lend again - but for the first few years of their particular recovery phase, they'll be more than a little selective. Once the manic boom scenario returns, they'll have long forgotten their old problems and naturally they'll dish out dosh to every NINJA who walks in the door. (Use the search engine re NINJA if you're a newcomer to these mutterings.) So what am I getting at here? Just that bargains WILL be there - and some will be almost unbelievable - then when prices recover, those who "bought cheap" can "sell dear" if they want. Cash - not credit - will become "king" again for several years at least, of that there is not a shadow of doubt.

Back during the last minor boom ("tech stocks", if you recall) a friend of mine - a fellow petrolhead albeit with very poor taste - sold an E Type Jaguar he had restored, for a smidgen under £100000. A few short years later, such cars were selling for about £30000 - a fair old loss for those who had bought at the peak but arguably a real bargain for the buyer - and my friend bought another one for £25000. Last year, top condition ones were back up in the £75000 area. Any idea as to what my friend did then? Today's price? I don't know because I don't follow that vehicle that closely - just not my tasse de thé at all - but for sure, in another couple of years they'll be on offer for well below £10000.... and houses will become affordable again - how can that possibly be considered a bad thing? I'll certainly be picking up another of my choice of classic cars for a song, that is certain. And a few properties too, all being well.....

Oops - sorry - cancel all the foregoing. News has just come in that the UK will NOT suffer a recession after all. Loft insulation will save the day. Insulation factories will open the length and breadth of the country, and unemployed estate agents, builders, and playground facilitators will all once again be able to afford their mortgage payments when they take up their new career. There will be full employment everywhere, paid for by the government. All British lofts will be fully insulated within a year......hang on, what happens after that? Factories will close, jobs will..........cancel the above cancellation then. And as for deferring stamp duty.....ho ho. Mr Darling seemingly committed the unforgiveable sin of telling the truth to a journalist - shock/horror all round. But he only told part of the truth. He said the UK faced the "worst conditions in 60 years." He also blamed the rest of the world. Not so, Allie. "75 years" will be nearer the truth as regards history- and the UK's particular mess has been caused by your current boss and all the pathetic grovellers who failed to stand up to him. "Where has all the money gone?" is a question once asked in these ramblings (try the exact phrase in the search engine.) It's not just Gordon of course - although his nauseating "purroodence/end of boom and bust" pronouncements really got up IW's nose - successive governments have caused the current huge imbalance in the British economy. Have a look at Norway - see how they have dealt with North Sea oil revenues!

Over in the USA, granny's crystal ball was bang on the money with the suggestion the other week that Freddie Mac and Fannie Mae would be nationalised. Shareholders will end up with zilch, and the bosses will of course be sacked - but doubtless on pretty lucrative terms. There is no justice. Will General Motors go bust? Granny says it will - and maybe Ford too......And isn't it amazing how USA "non farm payroll" figures say 51000 jobs were lost in June, then a few weeks later the figure is "revised" to 100000? What a con.

Moving on to even sillier stuff, it seems the Olympic Village will need an extra £250m from the British taxpayer, "due to the credit crunch". Nah - it's due to total ineptitude, guys. And if you think that will be the only "extra" then you really DO believe in the Sort Everything Fairy.

Then there's Easy Jet - the media headline was "Easy Jet defies the credit crunch" - due to planes continuing to be pretty full. Listen, selling loads of tickets at below cost doesn't actually make things profitable. 24 airlines have gone bust so far this year. And 11 US banks. Plenty more of that kind of thing still to come!

Oh yes, and I note that Norwich Union is rebranding its flagship "with profits" fund. It is to be renamed the "with losses" fund....

Anyway, scientists are switching on the Large Hadron Collider at CERN on Wednesday, so maybe the world will simply disappear into a self - manufactured black hole at that point and all this stockmarket nonsense will become totally irrelevant...........

On that note, onward to a recent email that is worth reproducing for you here: (my replies are arrowed below each question)

From: Alex
Subject: Some Advice
Hello Ian,
I hope you had a good and relaxing holiday.
I bought your course a few weeks ago and have read and re-read it.
And I’ve started. Yesterday I trawled through £250mil plus Market Cap companies looking for ones with potential. I looked for those where the 20 and 40 day MAs were pointing in the same direction, in this case upwards, and the price was about to pass both the previous high and significant resistance lines.

>>>> that is reasonable - but don't get fixated on 20/40.

My concern is that I seemed to find too many! Particularly in the Services Sector all with similar recent trends. There was a market bottom (??) in mid July after six months of downward movement and since then a general and maybe short lived upward trend which has made many of the 20 and 40 dma’s quite similar and upward, despite the doom and gloom.

>>>> as per recent WICS, consider that we are in (or were perhaps till yesterday) a bear market rally. Use the search engine for that phrase and also 'dead cat bounce'.

My thought is that the doom and gloom this year has been all pervasive and forced the market to act as one. The short term recovery since July has made the 20 and 40 dma’s look good, but things could go the other way and all shares will react and swing downwards, making these short dma’s a bit misleading
What do you think?

>>>> that is a fair analysis, although some will buck the downtrend for whatever reason, & if so, the chart will guide.

Despite this reservation in my enthusiasm to get started yesterday I placed up trades on Dairy Crest, Keller and Hargreaves Landsdowne, only a £1 a point but my exposure with the stops I’ve used (20 dma) is £148. It would be depressing if they all went wrong. I know you can’t give advice on particular shares, but if you think this recent up trend is a false dawn, and I should be using longer dmas let me know.

>>> that worries me. You didn't order the trades in advance - you just took them. That is NOT the TTEW methodology. Dairy Crest was mentioned in video clip 1611. It has since followed the script but the buy was on the triangle breakout. Keller was also featured some time ago (I don't have time right now to find but try the search engine or the video list) & the buy was above the three April/May resistance points. To jump in is to court disaster. Also, 3 buys & no sells?? DMAs - up to you but see above re 20/40.

Hopefully some of these remarks may help some of you.

On to today's charts then, and first we'll look at a triangle on Grainger (thanks to A.H. for asking the question). Then we'll update the Cattles picture from WICS of 3rd August, just to see how the overall bear market rally is now "dying the death". Finally there's a chart showing a countertrend channel in Daejan Holdings stock - just be aware of the price at which it's currently trading - "Pounds", not "pence".......

And that's the lot for this weekend - just please remember that no matter what "doom and gloom" might abound, there is no reason for YOU to be gloomy if you're able to trade. If you can build a "pot" by trading successfully over the next couple of years or so, you'll be able to reap the benefits when markets turn back up - both by buying "stuff" very cheaply if that's how you want to play things, and by buying into very depressed stock prices too. It's a fantastic time to be a trader!

On that positive note, all the best till next weekend.

Ian.

'IMPORTANT NOTICE: These WICS charts are for EDUCATIONAL PURPOSES ONLY. They represent only MY understanding of what is happening in the market for any particular share, stock, commodity or index. In NO circumstances should they be construed as recommendations to trade. If I choose to trade what I see, that is MY decision. YOU must, in turn, come to YOUR OWN conclusions about what action, if any, YOU might choose to take'.